College education is an expensive affair and most students search for loans to finance their studies and other related expenses. The students who do not have financial support from their family look for loans that are easily granted and offer low interest rates. Federal student loans are generally considered the best in this regard. And among the federal college loans, one of the popular ones is Federal Stafford loan.
Federal Stafford loans are federally guaranteed loans for students. These student loans are popular for their low interest rates. Subsidized and Unsubsidized loans are the two types of Federal Stafford loans available for students. Students who meet a financial-needs test are eligible for Stafford loans.
The federal government pays the interest on a subsidized Stafford loan when the student is enrolled in school. The federal government continues to pay the interest during the grace periods and the qualified deferment periods too.
On an unsubsidized Stafford loan the students are charged interest from the time the loan term starts. The student has to pay the interest till the time the loan is repaid. The borrower who is unable to pay the interest will have the interest added to the principal amount of the loan. This additional interest is calculated on the basis of the higher amount. In other words if the borrower doesn’t pay the interest as it is accrued it is capitalized.
Both the subsidized and the unsubsidized loan amounts of the Federal Stafford loans are granted based on an individual’s grade level. The lenders also take into account whether the borrower is financially dependent or independent on the family. However the Stafford loans are granted regardless of the family income of the student.
After graduation it is advisable to consider the repayment options and search for suitable student loan consolidation programs if required. Student college loan consolidation will combine the multiple payments into one monthly payment. This facility also reduces the monthly payment by locking in today’s low rates and also by extending the repayment period. Hence, graduate loan consolidation can surely help reduce the burden from the students. People who qualify can also apply for loan forgiveness in case they are unable to repay the amount.
